Age Vs Condition

[David Bodtcher]

I'm curious if everyone else out there only adjusts for one of these: age or condition. Or do most appraisers adjust both when necessary. I adjust both when comps for both are different than the subject. Got a review done by an appraiser and they said age and condition adjustments are one and the same and room count and sq ft are one and the same. How does everyone feel about this?

 

[Tater Salad]

I've always considered age and condition 2 different things. Under condition, I adjust for short-lived stuff (carpet, etc.). Just because it's older, doesn't mean the condition isn't good.

Maybe that's wrong?

As far as room count, the only room count adjustment I make is bathrooms. I've heard people say that this is wrong as well (should be a functional adjustment), but I often see higher sale prices for homes with 2+ bathrooms, that are otherwise similar in GLA, than for those with 1, and prefer to make the adjustment there.

Any other room count adjustments (bedroom only) I make under functional (assuming that one is warranted). Otherwise, overall room count and GLA I consider to be under the same umbrella. What rooms did you adjust for?

 

[David Bodtcher]

Thanks Calotz,

good to know other appraisers don't think age and condition are one and the same. Although, I must admit, I'm a little confused as to why the other appraiser you know chooses to adjust bathroom and bedroom differences in functional utility. A 3 bedroom home is still a good funtional home, just as a 4 bedroom home is still a good funtional home. They function good at what they are: a 3 or 4 bedroom home. Also, I think bathrooms would only be a functional problem if there is not a bathroom located on each floor, or if the bath count is not adequate enough for the room count. Otherwise, why not adjust for them in the actual bath/room count? Not trying to say anyone is wrong, just trying to understand the different tactics appraisers use, or to know if I'M doing something wrong.

Also, I adjust both room count and sq ft. Unless the sq ft is the same, it generally means the room count will be the same. But if there is a significant difference, I adjust them both. It seems (from the review appraisers adjustment) that it comes out to a similar adjustment when I adjust both sq ft and room count, while he only adjusts for sq ft. Anyone else adjust both sq ft and room count?

 

[Bill_FL]

Age and condition are the same thing? Has the reviewer ever been in an old Victorian home that has been compeltey renovated and the one next door has not?

Age and condition are two items. Adjust for them seperately.


Room counts are another issue. Typically, for bedrooms, you need to consider where the market associates a difference. I talked to some local rental agents. I wanted to know, if they had 3 1000sf homes, on the same street, etc. 1 has 3 bedrooms, one has 2, the other has 1, what would they rent for. All told me there is not much difference between the 2 and the 3. The big jump is for one bedroom. I suspected this when appraising and reviewing sales of 1 bedroom homes, but it was nice to get the back up.

 

[Restrain]

Age and condition are definitely different. You can find paired sales of updated or non-updated homes and figure the age adjustment for the area just as easy as the contributory value of updating, which is condition. I will not adjust bath differences in functional obsolescence, but I will adjust 2 bedrooms vs. 3/4 bedrooms in functional.

Roger

 

[wyecoyote]

My take on the issue. I make straight age adjustments most of the time. Like calotz states I use condition for short lived items and actual age for long lived items. There are times where I will make effective age adjustments instead of actual age. But these are still for long lived items. As far as room count yes I will adjust for a bedroom and bathroom unless the data is not showing an adjustment for these items. IE a 5 bedroom house to a 4 bedroom house most of the time data may not support an adjustment.

As far as the review appraiser goes. Well the review appraiser should be able to support the reasoning of why there are no adjustments with market data.

Ryan

 

[Pamela Crowley (Florida)]

I consider age and condition separately. I quit doing effective age vs actual age unless I'm dealing with something with updates and rebuilt to an extent that you wouldn't know you just walked into a 50 year old house. Floor plans, ceilings, building materials, etc date houses and unless there just isn't anything else, the age is the age because of those items.

 

[Phil Rice]

I appraise some very old homes, built in the 1700's and 1800's. And sometimes, they are fixed up and in fabulous condition, worth over $1M.

I have learned that in this area, after the first 15 years or so, age does not make much difference.

Condition makes a big difference. It is not unusual for me to make $100,000 condition adjustments.

 

[Alan Simmons]

I have no problem with either strategy for condition/age. I think that there are times when appraisers can argue condition and age should be included in one adjustment and there are times that they can just as well argue that they should be handled separately.

I strongly agree that age and condition are two distinct adjustments but I have seen a good number of reports where the total is just arbitrarily divide between the two. Why? If I can not reasonably tell which is which I just lump them together and move on, but this is not saying they are the same. I am just saying that there is insufficient information to determine how much of the market’s reaction is specifically attributable to age and how much is specifically attributable to condition. Does it really affect the intended use anyway?

A somewhat funny example would be to pee into a pool full of spring-water. The next day remove some of the water with a glass. How much in the glass is the original pool water and how much is pee? How much of the glass are you willing to drink? Do you already have sufficient information to make your decision? Would it help if an appraiser guessed the percentages for you?

Ditto for GLA and room count.

One of my pet peeves is reviewers that think there is only one way (always the one they understand) to appraise a property. Did he read your report to determine its validity or did he just jump on you for not doing things his way?

 

[Mike Garrett RAA]

Your reviewer travels to the beat of a different drummer! Probably someone who just got licensed and thinks they know it all OR some old **** who thinks he is the only person who is right.

Age and condition are different items, duh....otherwise why two lines on the grid! Appraisers can and do make adjustments differently. Some do not adjust for age, others do. I prefer to adjust both seperately otherwise your adjustment might be to much for a single line item.

I do not adjust for rooms and GLA....I believe it to be double dipping. The exception is bathrooms which is is adjusted under the room count.

Numbers of baths is technically function but very few appraisers adjust for them there. Read Henry Harrison's Illustrated Guide to the URAR. It is considered the bible for form appraisal.